Main Challenges of Doing
Business in Vietnam
Vietnam has become more attractive for foreign investors that want to establish and expand their business in the country. Because of prosperous investment environment in Vietnam, the country has seen a sharp increase in foreign direct investment (FDI). But doing business in Vietnam is accompanied by several challenges foreign investor should know about. Here we want to tell you about the most important ones.
Today, Vietnam is one of the most rapidly developing countries in Southeast Asia due to several reasons. Those are the economic reforms implemented in the 90s, the fastest-growing middle class in SEA, participation in numerous intraregional and international trade agreements (like RCEP and EU-Vietnam FTA). This development is also driven by a growing young and educated population and an expanding domestic consumer market.
According to the forecasts, in the medium and long term the country’s economy is expected to grow by more than 6% annually.
Restrictions for some foreign investments
Before staring business in Vietnam, learn more about what kind of foreign business is prohibited in the country. For example, foreigners aren’t allowed to run business that deals with particular chemicals, minerals, drugs, firecrackers, and others.
Cash payments
Cash payments are extremely widespread in Vietnam. More than 90% of the country’s transactions are done in cash because of unreliable cashless system and ATMs. In this sphere the government takes some measures as well. It focuses on simplifying digital payments systems and adoption of technologies that may promote it.
According to the forecasts, in the medium and long term the country’s economy is expected to grow by more than 6% annually.
Restrictions for some foreign investments
Before staring business in Vietnam, learn more about what kind of foreign business is prohibited in the country. For example, foreigners aren’t allowed to run business that deals with particular chemicals, minerals, drugs, firecrackers, and others.
Cash payments
Cash payments are extremely widespread in Vietnam. More than 90% of the country’s transactions are done in cash because of unreliable cashless system and ATMs. In this sphere the government takes some measures as well. It focuses on simplifying digital payments systems and adoption of technologies that may promote it.
Complicated tax system
Vietnamese reform aimed at simplifying tax system is underway, but there are still 10 corporate tax payments that must be paid annually. Other taxes cover VAT and social insurance.
Through implementing this reform Vietnamese government intends to simplify all tax calculations and declaration procedures and clarify some tax issues. There is also progress in terms of the improvement of technology for tax reporting such as electronic tax declaration.
Lack of transparency and bureaucracy
Nowadays, Vietnamese economy is significantly changing. However, lack of transparency and bureaucracy in regulations are still quite common in the country. Vietnam’s overlapping jurisdiction of ministries lead to a lack of consistency in policies as well as a lack of corporate financial transparency. These may also cause some problems and be an obstacle for your business.
Awesome products Co. can help you to solve all the problems and overcome challenges you may face with while doing business in Vietnam. Awesome Products Co. is a Vietnamese distributor that has years of experience selling our brands not only in Vietnam, but at major marketplaces in Southeast Asia such as Lazada, Shopee, Tiki, and Sendo. Contact us for possible cooperation and inquiries!
Vietnamese reform aimed at simplifying tax system is underway, but there are still 10 corporate tax payments that must be paid annually. Other taxes cover VAT and social insurance.
Through implementing this reform Vietnamese government intends to simplify all tax calculations and declaration procedures and clarify some tax issues. There is also progress in terms of the improvement of technology for tax reporting such as electronic tax declaration.
Lack of transparency and bureaucracy
Nowadays, Vietnamese economy is significantly changing. However, lack of transparency and bureaucracy in regulations are still quite common in the country. Vietnam’s overlapping jurisdiction of ministries lead to a lack of consistency in policies as well as a lack of corporate financial transparency. These may also cause some problems and be an obstacle for your business.
Awesome products Co. can help you to solve all the problems and overcome challenges you may face with while doing business in Vietnam. Awesome Products Co. is a Vietnamese distributor that has years of experience selling our brands not only in Vietnam, but at major marketplaces in Southeast Asia such as Lazada, Shopee, Tiki, and Sendo. Contact us for possible cooperation and inquiries!
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